Billionaires Who Suck The Country Dry: Nirav Modi, The Man At The Centre Of The PNB Fraud

Like most Indians, I know Nirav Modi as the fancy store we never enter, but only admire for its stylish décor. The first time I got acquainted with the name was on a regular weekend outing at a fancy mall. As I gazed at the store trying not to look too middle class, I wondered what goes on in the lives of those who run empires like these.

When news of the Rs 11,400-crore scam involving Nirav Modi and PNB broke, the ordinary Indian who works overtime to afford a gold chain must have felt cheated. Turns out the rich and famous are not as flawless as their velvet gowns and Italian tuxes.

Who is Nirav Modi, beyond the fancy boutiques?

Turns out Nirav Modi was born not with a silver, but with a diamond spoon. He grew up in Antwerp, known as the diamond capital of the world, in a successful diamond business family.

His maternal uncle Mehul Choksi was the chairman of Gitanjali Gems Ltd., where Nirav would go on to work for 9 years polishing his rough-cut diamond. Surrounded by skilled businessmen in the field, Modi learnt the trade from within. No one knew that the soft-spoken young man, who initially wanted to be a music conductor, would go on to become a top internationally-renowned jewellery designer and diamond honcho. People also didn't know that he would himself at the centre of a multi-billion fraud involving one of India's biggest banks.

Much has been talked about his lavish lifestyle. From the most advanced music systems to swanky beetle cars, Nirav is known for his expensive taste. Last November, he is said to have thrown a party at Four Seasons that hosted meals by three-star Michelin chef Massimo Bottura, whose restaurant Osteria Francescana was listed as one of the best 50 restaurants in the world. One can't help but be reminded of the 'King of Good Times' Vijay Mallya whose sixtieth birthday bash reportedly cost over $2 million and saw Latino sensation Enrique Iglesias perform for the 200 odd guests at the party. Mallya, who is currently living in London, was accused by 17 Indian banks of wilfully defaulting over $1.4 billion. It's been over 2 years and he still owes the money.

Though he founded his company Firestar in 1999, he ventured into jewellery designing only in 2009, when on a friend's request, he designed a pair of diamond earrings. There was no looking back. In 2010, he became the first Indian to get featured on the cover of Christie's catalogue. This was for a Golconda diamond necklace which was eventually auctioned at a whopping $3.56 million. Another necklace called the Riviere of Perfection fetched $5.1 million at an auction by Sotheby's. The year also saw Nirav Modi becoming a brand.

Nirav was moving ahead at an unbelievable speed and his jewellery began to be flaunted by international celebrities, that included Kate Winslet, Naomi Watts, Rosie Huntington-Whiteley. He set up showrooms in London, Beijing, Hong Kong and Delhi. In 2017, he was featured on Forbes's list of world's billionaires at 1,234 rank. The who's who of India's rich and wealthy was buying their diamonds from Nirav Modi.

Not many knew there was a multi-billion scam brewing underneath the shine of the diamonds. The empire had already fallen under the scanner and enquiry into its dealings with the banks was underway. On 29 January 2018, PNB filed a complaint with the CBI for a Rs 280-crore fraud against Solar Exports, Stellar Diamonds and Diamonds R US, companies connected to Nirav Modi. By February 14, the figure had raised to Rs 11,300 crore.

The companies were accused of obtaining Letters of Undertaking (LoUs) from PNB without paying up the margin amount against loans, which meant that if the companies failed to pay up the loan, PNB was liable to pay instead. A LoU, basically, means a bank guarantee from the issuing bank to a receiving bank undertaking to pay a specific amount till a specific date. The LoU is then used by the company to get short-term loans from the receiving bank. In this case, there was an absence of any collateral or margin amount paid by Nirav Modi's companies. Of course, this couldn't have been done without a collussion between some bank employees and the respective companies.

While 10 PNB officials have already been suspended, Nirav Modi, along with his wife, brother and uncle Mehul Choksi left India in the first week of January itself.

As more details about the case emerge and it remains to be seen if the defaulters would be brought to justice, the Indian middle class man, who is still working overtime to buy a new bike, remains frustrated.